As KB Home (KBH) gears up for its fourth-quarter earnings release on January 13, 2025, Wall Street analysts project notable growth in earnings and revenue. The company’s performance in the competitive residential construction sector will be closely analyzed, especially as the industry faces broader challenges.
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Expected Q4 Earnings Report of KB Home:
Analysts anticipate KB Home will report quarterly earnings of $2.45 per share, a significant year-over-year increase of 32.4%. Revenues are projected to reach $1.99 billion, marking a 19% growth compared to the same period last year. Key figures include:
- Total Revenues – Homebuilding: $1.98 billion, a year-over-year increase of 19.1%.
- Total Revenues – Financial Services: $9.51 million, an increase of 5.9%.
- Unit Deliveries – Total Homes: 3,882 units, up from 3,407 units in the previous year.
- Average Selling Price: $510,410, compared to $487,300 last year.
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Stock Target Advisor’s Analysis on KB Home:
Stock Target Advisor’s analysis provides a bearish outlook on KB Home. The evaluation, which includes four negative signals and no positive ones, highlights concern such as:
- Poor Risk-Adjusted Returns: Despite gains, returns remain inconsistent and below median levels for industry peers.
- Weak Revenue and Dividend Growth: Five-year revenue growth is 40.99%, while dividend growth has seen a sharp decline of -677.73%.
- Sector Challenges: The Residential Construction sector has faced a one-month return of -17.9%, reflected in KB Home’s 14.06% decline over the same period.
Despite these challenges, KB Home has recorded a one-year capital gain of 3.09%. The average analyst target price stands at $82.25, suggesting potential upside from the last closing price of $64.47.
Analyst ratings provide mixed sentiments:
- Wells Fargo & Company: Downgraded KB Home to “Underweight” and revised its price target from $83 to $74 on December 17, 2024.
- J.P. Morgan Chase & Co: Assigned a “Neutral” rating, lowering the price target from $92.5 to $82 on December 13, 2024.
- Barclays: Downgraded KB Home to “Equal-Weight,” adjusting its target price from $99 to $85 on December 11, 2024.
Conclusion:
With a mix of optimism and caution, KB Home’s (KBH) upcoming Q4 earnings report will be a critical indicator of its resilience in a challenging market. The January 13 release will likely shape KB Home’s near-term trajectory in the stock market.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
